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Investing in mutual funds is a popular and smart way to grow your wealth over time. These funds pool money from various investors and invest in a diversified portfolio of securities, managed by professional fund managers.

While mutual funds offer many advantages, they also come with certain complexities, one of which is unclaimed dividends. In this comprehensive guide, we will delve into the intricacies of unclaimed dividends and unclaimed money in mutual funds and explore the solutions available to investors to address this issue.

Understanding Unclaimed Dividends and Unclaimed Money

Unclaimed dividend refers to the portion of the mutual fund's profit or income that has not been collected by the investors. Mutual funds distribute dividends to their unit holders regularly, typically on an annual or semi-annual basis. However, sometimes investors may not claim their dividends due to various reasons, such as outdated contact information or oversight.

Unclaimed money, on the other hand, goes beyond unclaimed dividends and encompasses any money that belongs to investors but remains unclaimed. This can include matured investments, redemptions, or any other form of fund distribution that investors have not received.

The Impact of Unclaimed Dividends and Unclaimed Money

Unclaimed dividends and unclaimed money can create challenges for both mutual fund companies and investors. For mutual fund companies, managing unclaimed dividends can be administratively burdensome.

It requires record-keeping, regulatory compliance, and efforts to reach out to investors with unclaimed dividends. This diverts resources that could otherwise be used for enhancing fund performance.

For investors, unclaimed dividends mean missing out on potential returns and the benefits of compounding. It also raises concerns about the security and efficiency of the mutual fund's operations. Additionally, not claiming dividends may result in tax implications for investors.

Searching for Unclaimed Dividends

If you suspect that you have an unclaimed dividend from a mutual fund, you can take specific steps to reclaim it.

First, gather all the necessary documents related to your mutual fund investment, such as account statements, folio numbers, and PAN card. Next, visit the official website of the mutual fund house where you made the investment.

Most mutual fund companies have a dedicated section on their website to help investors search for unclaimed dividends or unclaimed money. Look for the "Investor Services" or "Unclaimed Dividend" on the website. Enter your folio number and other required details to check if there are any unclaimed dividends associated with your account.

The Process of Claiming Unclaimed Dividend

If you have identified unclaimed dividends or unclaimed money, the process to claim it is usually straightforward. You will need to download the relevant form from the mutual fund company's website or request it from their investor services department.

Fill out the form accurately, providing all necessary details, and attach the required documents as specified in the form. Commonly requested documents include identity proof, address proof, and bank account details for direct credit of the dividend amount.

Submit the completed form and documents either through the online portal or by mailing it to the mutual fund company's office. After verification, the mutual fund company will process your claim and credit the unclaimed dividend to your registered bank account.

Preventing Unclaimed Dividends and Unclaimed Money

Prevention is always better than cure. To avoid the hassles of unclaimed dividends, investors can take some precautionary measures:

1. Keep Contact Information Updated: Ensure that you update your contact details with the mutual fund company promptly. This includes your mailing address, phone number, and email address.

2. Opt for ECS: Consider opting for the Electronic Clearing Service (ECS) facility to receive dividends directly in your bank account. This reduces the chances of missing out on dividend payments.

3. Consolidate Your Investments: If you have multiple mutual fund investments, consider consolidating them under a single folio. This simplifies record-keeping and makes it easier to keep track of your investments.

Final Word

Unclaimed dividends and unclaimed money are common complexities in the world of mutual funds. However, with the knowledge of how to search for unclaimed dividends and the steps to claim them, investors can address this issue efficiently.

Remember, staying informed and proactive is the key to a successful mutual fund investment journey. So, take the necessary steps to keep track of your investments and never miss out on what is rightfully yours.

Invest wisely, invest responsibly!

Introduction:

Unclaimed provident funds have become a significant issue in recent years, affecting both employees and employers. This blog aims to provide a comprehensive understanding of what unclaimed provident funds are, why they occur, and how they can be addressed. By shedding light on this topic, individuals and organizations can take proactive measures to prevent and manage unclaimed funds effectively.

What are Unclaimed Provident Funds?

Unclaimed provident funds refer to accumulated retirement savings that have not been claimed by eligible individuals. These funds typically originate from mandatory contributions made by employees and employers towards a retirement plan, such as a provident fund or pension scheme. Over time, if these funds remain unclaimed, they are classified as unclaimed provident funds.

What Causes Unclaimed Provident Funds?

Several factors contribute to the occurrence of unclaimed provident funds. Some common reasons include:

1. Lack of awareness: Employees may not be aware of their entitlements or the process of claiming their provident funds upon retirement or termination of employment.

2. Incomplete documentation: Insufficient or inaccurate documentation can delay or prevent the release of provident funds to eligible individuals.

3. Change in contact information: Individuals may fail to update their contact details with the relevant authorities, making it challenging to communicate and process their claims.

4. Negligence or oversight: Employers or retirement fund administrators may overlook or neglect their responsibility to facilitate the timely disbursement of provident funds.

5. Employee Relocation: When employees change jobs or relocate without updating their contact information, they may lose track of their provident fund accounts.

6. Deceased Account Holders: In some cases, the account holders may pass away without naming beneficiaries or notifying their loved ones about the existence of the fund.

7. Inactive Accounts: Some individuals may forget about their provident fund accounts, leading to accounts remaining inactive for an extended period.

How to Recover  Unclaimed Provident Funds?

It is essential for individuals to proactively manage their provident funds and keep their contact information up-to-date to avoid funds going unclaimed. Regularly check and consolidate all retirement accounts to ensure a secure financial future during retirement. Efforts can be made at both individual and organizational levels to address the issue of unclaimed provident funds services. Here are some suggested measures:

1. Awareness campaigns: Employers and retirement fund administrators should conduct regular awareness campaigns to educate employees about their rights, entitlements, and the process of claiming their provident funds.

2. Efficient record-keeping: Employers should maintain accurate and up-to-date records of employee details, including contact information, to ensure effective communication regarding provident fund claims.

3. Regular communication:Employers should proactively communicate with employees regarding their provident fund status, including reminders to update contact information and instructions on the claim process.

4. Streamlined claim process: Retirement fund administrators should develop a simplified and transparent claim process to facilitate the timely release of provident funds to eligible individuals.

5. Periodic audits: Employers and retirement fund administrators should conduct regular audits to identify any unclaimed provident funds and take necessary steps to resolve and disburse them to the rightful owners.

6. Contact the Institution: Reach out to the financial institution where the provident fund is held. Provide relevant identification and account details to initiate the claim process.

7. Submit Documentation: Submit required documents, such as proof of identity, proof of relationship (in case of beneficiaries), and any other documents requested by the institution.

8. Verification Process: The institution will conduct a verification process to ensure the rightful claimant is accessing the funds.

9. Claim Processing: Once the verification is complete, the claim will be processed, and the funds will be released to the claimant.

10. Government Initiatives: In some cases, governments may run unclaimed property programs to reunite individuals with their unclaimed funds. Check with the relevant government agency for such initiatives.

11. Online Portals: Some financial institutions provide provident fund withdrawals online for account holders to check the status of their accounts and initiate claims.

Role of Share Samadhan in Helping Individuals Recover Funds

Share Samadhan plays a crucial role in assisting individuals in provident fund claims. The organization understands the challenges faced by individuals who have lost their investments or funds due to various reasons. Share Samadhan provides a comprehensive platform that offers guidance, support, and solutions to individuals seeking to recover their lost funds.

One of the primary ways in which Share Samadhan helps individuals is by offering expert advice and assistance in navigating the complex legal and financial processes involved in fund recovery. The organization has a team of experienced professionals who specialize in fund recovery and are well-versed in the intricacies of the legal system. Their expertise helps individuals understand their rights, options, and the steps required to recover their funds.

Share Samadhan also provides a platform for individuals to connect with others who have faced similar situations. This community support can be invaluable as individuals can share their experiences, learn from others, and gain insights into the best strategies for fund recovery. The organization facilitates this connection through online forums, webinars, and support groups, ensuring individuals have access to a supportive network.

In addition to advice and community support, Share Samadhan offers a range of resources and tools to assist individuals in their fund recovery efforts. These resources include educational materials, step-by-step guides, and templates for legal documents. By providing individuals with these resources, Share Samadhan empowers them to take proactive steps toward recovering their funds.

Share Samadhan also actively collaborates with legal professionals, regulatory bodies, and financial institutions to advocate for individuals seeking fund recovery. The organization works towards creating awareness about scams, fraudulent investment schemes, and other financial risks that may lead to fund loss. Through these collaborations, Share Samadhan strives to bring about positive changes in the financial industry and ensure better protection for individuals' investments.

In conclusion, Share Samadhan plays a vital role in helping individuals recover their funds. By providing expert advice, community support, resources, and advocacy, the organization assists individuals in navigating the complex process of fund recovery. Share Samadhan aims to empower individuals and ensure that they have the necessary tools and support to successfully recover their lost funds.

Conclusion:

Unclaimed provident funds pose a significant challenge to both employees and employers. By understanding the causes and implementing proactive measures, individuals and organizations can prevent and address the issue effectively. Increased awareness, efficient record-keeping, regular communication, streamlined claim processes, and periodic audits are essential in ensuring that provident funds are rightfully claimed and utilized for retirement purposes.

Didn't we all hear stories like our grandparents invested in a company's shares, and now they are worth millions? Well, most of these stories had a sad ending about how those shares remain unclaimed to date. If only there were a way to claim those shares after our grand parent's sudden demise.

Hence, the Ministry of Corporate Affairs (MCA) set up the Investor Education and Protection Fund (IEPF). Companies transfer shares where no one has claimed dividends for over seven years to this government body.

Investor Education and Protection Fund (IEPF)

The Central Government of India introduced IEPF under the provisions of section 125 of the Companies ACT, 2013. The objective behind the whole idea was to promote awareness, educate and protect investors.

Things that get transferred to the IEPF

• Unclaimed dividends
• Matured debentures
• Matured deposits
• Unclaimed shares
• Application money due for refund
• Interests accrued on the aforementioned things
• Investor money recovered from fraud

How to claim a refund from IEPF?

Today we will discuss how you can reclaim shares from IEPF. Please remember that we are only discussing the refund of shares because the process is more or less the same for others.

Step 1: Filling the IEPF 5 form

• Visit the official website of IEPF and click on the Web IEPF 5 form.

• You will be redirected to the official website of the Ministry of Corporate Affairs.

• After signing up or logging in, fill out the form and download it to your computer.

• Visit the IEPF website, click on services, and then click on 'Upload eForms'.

• Once the application is successfully uploaded, an acknowledgment will be generated with Services Request Number (SRN).

Step 2: Claim submission to the company

Once you are done filling out the IEPF 5 Form, you need to make a printout of the form and send it to the company's IEPF Nodal Officer/Registrar in an envelope marked 'Claim for refund from IEPF Authority' along with the following documents:

• Print a copy of the IEPF form with the claimant's signature.

• Copy of the generated acknowledgment with the SRN number.

• Indemnity bond (original) signed by the claimant (As per Annexure-II format for applications) on a non-judicial stamp paper of the value stated under the Stamp Act.

• Advanced stamped receipt (original) signed by the claimant and two witnesses.

• Share certificates (original) and if the securities are not in physical form then a copy of the transaction statement would be required.

• Copy of Aadhar Card (if there's a joint holder then their copy of Aadhar card too)

• Share certificate, interest warrant, dividend warrant application number, etc., as proof of entitlement.

• Canceled cheque bearing claimant's name

• Foreigners and NRIs should provide self-attested copies of their passports, OCI cards, and PIO cards

• Pan Card (self-attested)

• Self-attested copy of client master list of claimant's Demat AC

• In the case of a deceased joint holder, a copy of the death certificate is necessary.

Step 3- The company sends a verification report to the IEPF authority

The company will send a verification report along with all the documents submitted by the claimant to the IEPF Authority within 15 days of the claim submission from the claimant's side.

Final step- Refund from the IEPF Authority

The IEPF Authority will make final a decision on the refund application within 60 days of receiving the verification report from the company that verified the application.

If the shares are reclaimed the Authority will issue an e-payment of the refund and the shares will be credited to the claimant's Demat AC.

Disclaimer-

The information and materials on this blog are for informational purposes, and they do not create an attorney-client relationship. The information on this blog does not serve as legal or professional advice and should not be used as a substitute for seeking legal advice from a licensed attorney in your state.

Introduction

Investing in shares is an excellent move if you plan & execute it properly. But not only to plan before buying the shares, one must also need to ensure the future security & authority of the investments too! But often there are cases where the account holder dies without mentioning any successors. Many times there arrives more than one claiming party and the process of transferring shares becomes very complicated & time-consuming.

In this blog, we are going to discuss the different aspects of transferring shares in case of the deceased individual didn’t appoint any nominee.

Transferring shares to claimant heirs, a complex process with different attributes!

When a person dies, the invested shares are distributed according to his/her will. If the person passes away without leaving a will, there are processes of transferring ownership based on the type of the shares depending on whether the shares are physically documented or held in electronic form.

If the shares are in physical certification, the transfer process needs necessary documents from the claimant heirs along with the share certificates to the registrar of the organization or the transfer agent. All the documents will then thoroughly be verified & based on the verification, it will be decided whether the heir will be entitled to own the shares or not. Once the process is completed successfully, the records are updated & new share certificates are issued to the subsequent legal heirs.

When the shares are in electronic form, the process of transferring ownership becomes a bit more complex. Here, the ownership is recorded in a secured central database managed by a Depository Participant (DP) who is responsible for managing the records of all the transactions of the shares. In this case of transfer ownership the legal heirs of the deceased account holder must have a DEMAT account. Here, all the required documents need to be submitted to the DP. After verification, the authority of the shares will be given to the legal heirs accordingly.

Possible challenges that may arise

If there are multiple bodies that are legal heirs & asking for share ownership, it becomes challenging to distribute the share accordingly. For, maximum cases, the parties are asked to settle mutually. But if it’s still not resolved, it’s advised to go to legal authorities like court for settlement of the disputes.

Also, there are cases, where the account holder passed away with outstanding loans or liabilities. In these situations, sometimes the lenders claim the shares as collaterals! This is a severe matter of concern & the legal heirs must need to manage these things before asking for the ownership of the shares. Otherwise, it will become a serious headache & turn into nothing but a big loss! Here also, they can seek legal counsel to look into this matter & decide if the lender's claim will stay or not.

Documents needed for completing the process successfully

• Death Certificate of the account holder
• Transmission Form
• Notarized Affidavit of the legal heirs who are claiming ownership
• Notarized No Objection Certificate (NOC) from every non-claimant legal heirs
• Copy of the will of the deceased
• Self-attested copy of PAN card & Aadhaar card of the legal heirs who are claiming ownership
• Original Share Certificate
• Legal Heir Certificate
• Notarized letter of Indemnity

Some points to be noted!

• The indemnity bond is a legal precautionary document that protects the transfer agent from any disputes, claims, or liabilities that may arise between the legal heirs or other stakeholders in the future.
• If the value of the account does not exceed 1 lakh, the DP can process the request for authority ownership with minimal documentation including NOC from all legal heirs, an Indemnity letter & Affidavit.
• After the successful transmission of ownership, the DEMAT account will be closed by the DP.

On an ending note

The process of transferring ownership can take a long time depending on the complexities of the situation. The authority is concerned about offering ownership to the proper legal successor of the deceased shareholder. All the verifications, documentation & legal procedures are performed to ensure that the ownership goes to the right person. All the procedures take place under the financial & security exchange rules & regulations of the Government of India and any party concerned can ask for court involvement if any inconvenience is assumed during the process.

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What is Unclaimed Bank Deposit & In-operative Bank Accounts:

1. Unclaimed Bank Deposit includes funds in Current account, Saving account, Fixed Deposit, Recurring Deposits, etc with banks.

2. As per RBI regulation, an account where there has been no transaction for 2 years other than the interest being credited or maintenance charges being debited, is called an In-operative bank account/Dormant account.

3. If an account remains inoperative for 10 years or more, then such accounts/deposits are classified as Unclaimed Bank Deposits. 

4. Normally Deposits remain unclaimed due to Change of address, Non-completion of KYC, Not updating Nominee details, etc.

What happens with Unclaimed Deposit:

1. All the amounts classified as Unclaimed Bank Deposit is transferred to a fund maintained by RBI which is known as Depositor Education and Awareness Fund (DEAF). 

2. RBI transfers the Unclaimed deposit to DEAF every month. Around Rs 48262 crores is lying in DEAF at the FY ended 2021-22. 

3. A committee set up by RBI invests the money transferred to DEAF in instruments such as government securities. 

4. The Unclaimed money earns interest at the rate specified by RBI. The income earned from DEAF is used to pay interest on deposits and for investor education and awareness purpose.

How Customers can claim the Unclaimed Bank Deposit:

1. As per RBI regulations, banks are required to show the details of Unclaimed Bank Deposit on the Bank’s website. 

2. Customers can check the details of their unclaimed bank deposit on the bank's website and then visit the bank to claim it. 

3. Customers need to present duly filled claim form, Receipt of Deposits, and their KYC documents such as PAN, Address proof, etc at the bank. 

4. If a customer is claiming the deposit in the capacity of a legal heir, then they additionally need to present the death certificate of the account holder and document evidencing the legal heirship. 

5. After verifying the genuineness of the claim, the bank will release payment to the claimant.

6. After the Bank makes payment to the customer, it lodges the claim with RBI to get the refund from DEAF for such claim settled.

Connect with Share Samadhan for the following queries by clicking here or call at 8800332200:
• How to recover unclaimed bank deposits?
• How to claim money from inoperative bank accounts? 
• How to activate a dormant account in the bank?
• How do I get unclaimed bank deposits?
• How do I claim dormant money in the bank?
• How much money is lying in unclaimed amounts?
• How do I activate my inoperative bank account?
• How to activate an inoperative bank account?

• What is DEAF fund of RBI?

Write to us at samadhan@sharesamadhan.com, should you have any queries.

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